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|Economy Shrinks Annualized 2.4% On Weak Domestic Demand
Economy Shrinks Annualized 2.4% On Weak Domestic Demand
(Nikkei) Declining consumer and capital spending contributed to pushing down Japan’s gross domestic product 0.6% in real terms from the previous quarter during the April-June period, for an annualized rate of minus 2.4%, according to preliminary data released Wednesday by the Cabinet Office.
The first contraction in four quarters was also attributed to a drop-off in exports amid the U.S. economic slowdown.
Domestic demand contracted 0.6%, with personal spending shrinking 0.5% as price hikes for a number of daily necessities dampened consumer sentiment. The weaker demand also reflected the fact that the previous quarter had one more day than in normal years because 2008 is a leap year.
Capital spending declined 0.2%, while housing investment slid 3.4%. Overall domestic demand pushed down GDP growth by 0.6 percentage point.
Exports, which had until recently driven economic growth, fell 2.3%, meaning overseas demand failed to push up GDP growth in the three months ended June.
In nominal terms, GDP contracted 0.7% for an annualized rate of minus 2.7%.
Fails to mention it grew at over 3% in the prior quarter, so the two quarter average is marginally positive. Japan data seems to have more noise than US data.
Also note the nominal measure over the last year:
Nominal GDP Q/Q:
Lots of noise due to ‘inflation’ as they measure it.
Yes, a soft quarterly report, but as expected or slightly better than expected on most counts.
Same twin themes as the US: weakness and higher prices.
And lots of talk about a fiscal program over there.